How (and Why) Obama Should Kill the Public Option

First of all, let's be clear on one thing. The public option has the same level of support from the Obama administration that it did a month ago. The president has consistently said that he believes a health care reform bill should have a non-profit option to keep insurance companies honest, but has insisted that the public option isn't the most important part of health care reform. This is a focus on the destination, not the road taken to get there, yet the media loves their "Democrats divided" storyline so much, every conditional statement becomes a tempest in a teapot.

- An individual mandate that gets us close to universal coverage and includes subsidies for those earning up to 400% of the poverty level.

- A health care exchange that enables people to more easily compare and buy health care plans while giving them the power to collectively bargain for lower rates.

- A bevy of new insurance company regulations that will limit out-of-pocket expenses, keep insurance companies from refusing or limiting coverage if you get sick, and stop discrimination based on gender or pre-existing conditions.

If every other part of the eventual bill is as robust as it needs to be, as Kevin Drum and Joe Klein have pointed out, a public option won't even be necessary. Or to put it another way, if you've already bought into the idea that magical free market fairies are going to help the public option compete with insurance companies and keep health care costs down, then strict regulations and an working health care exchange should already do the trick. The danger isn't health care reform minus a public option, it's health care reform that has had other aspects watered down in order to bargain for a public option.

I shed no tears for the insurance industry. The billions of dollars they've made by denying care to sick customers is dirty money. Trying to reform health care while being concerned about their bottom line would be like London police having second thoughts about arresting Sweeney Todd because the delivery boy at the pie shop downstairs might get laid off. You don't get to profit off the suffering of others anymore? Tough shit. This alone is why I support the inclusion of non-profit health care providers in health care reform. Any industry that's willing to let people die to protect their profits isn't above price fixing.

Yet, at risk of sounding like a weak-kneed, centrist Democrat, the public option is a really dumb idea. It is to single payer what civil unions are to gay marriage, an idea that looks good on paper to the elites who aren't affected by it directly but just reeks of beltway compromise. I'm dismayed by the obsession with the public option that has taken the left by storm. This is what progressives are drawing a line in the sand for?

The problem isn't that a public option won't accomplish what its proponents say it will, but that the whole concept of a "public option" is so fuzzy that it almost invites suspicion. Conservatives imagine it as government-run takeover of health care that will put insurance industries out of business, while liberals are convinced it's the closest thing to single-payer they're likely to get and hope it will strike a serious blow to the murder-by-spreadsheet industry. Yet many activists on both sides seem unaware that there are multiple versions of the public plan and that in even the most liberal healthcare bills, the public option is limited to heath care exchanges which in turn are limited to the unemployed, the self-employed, and small businesses. In short, the promise of a public plan isn't great enough to justify liberal glee or conservative paranoia.

If I had my way, I'd dump the public option immediately and banish the words "public" and "option" from the vocabularies of any Democratic leaders trying to drum up support for reform. The public option may be uniting the liberal base (which is a very, very good thing), but it has proven toxic for the centrist Democrats whose support is needed to block a Republican filibuster in the Senate (which is a very, very bad thing). In its place, the Democrats should announce a Medicare Consumer Plan will be available on the health care exchanges. The beauty of this approach is that it would seem like a great compromise on the part of progressive Democrats (since most aren't fully aware of the limitations of the public option), but it's much stronger policy-wise and politically :

- Medicare's existing bargaining power could ensure lower costs for consumers while eliminating much of the haggling within Congress about what form a public option would take.

- Expanding Medicare would likely have much lower administrative costs than setting up a whole new public insurance plan from scratch.

- By demonstrating a renewed commitment to Medicare, reformers would help tamp down opposition from seniors

- Conservatives have a much harder time making "devil's in the details" arguments. People don't know what a public option is, but we've had Medicare long enough to know it isn't the second coming of Hitler.

Ultimately, I don't like having free market fundamentalism determine the shape of our health care system, but liberals already lost that battle. (I guess that's what you get when you share a democracy with people who think the Devil buried the dinosaur bones to trick us into not believing in Jesus.) If we're going to go with a market-based solution to our health care woes, let's go with one that's cheaper, already works, and is harder to reform opponents to criticize. Since we can't have Medicare-for-All, can we at least get Medicare-for-Those-Who-Want-It?